michael s. (mickey) fulp · microsoft powerpoint - ppt0000012.ppt [read-only] author:...
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Disclaimer
I am not a certified financial analyst, broker, or professional qualified to offer investment advice. Nothing in a technical report, commentary, interview, presentation, this website, and other content constitutes or can be construed as investment advice or an offer or solicitation to buy or sell stock. Information is obtained from research of public documents and content available on the company’s website, regulatory filings, various stock exchange websites, and stock information services, through discussions with company representatives, agents, other professionals and investors, and field visits. While the information is believed to be accurate and reliable, it is not guaranteed or implied to be so. The information may not be complete or correct; it is provided in good faith but without any legal responsibility or obligation to provide future updates. I accept no responsibility, or assume any liability, whatsoever, for any direct, indirect or consequential loss arising from the use of the information. The information contained in a technical report, commentary, interview, presentation, this website, and other content is subject to change without notice, may become outdated, and will not be updated. A technical report, commentary, interview, presentation, this website, and other content reflect my personal opinions and views and nothing more. All content of is subject to international copyright protection and no part or portion of this website, technical report, commentary, interview, presentation, and other content may be altered, reproduced, copied, emailed, faxed, or distributed in any form without the express written consent of Michael S. (Mickey) Fulp, Mercenary Geologist.com LLC.
Copyright © 2011 Mercenary Geologist.com LLC All Rights Reserved.
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The REE Commodity Play
• Speculating in Junior Resource Companies
• Separating the Few Contenders
• From the Many Pretenders
• What the Press Release Will Not Tell You
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Key Evaluation Criteria
• Share Structure
• People
• Projects
• Undervalue
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World REE Deposits
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Current REE Resources
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Projects
Priority Targets:
• Flagship Project or Prospect Generator
• Distribution of 16 Rare Earth Elements
• Deposit Type = Potential Metal Content
• Location & Geopolitical Environment
• Time to Development
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Tasman Metals Ltd Norra Karr, Sweden
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Share Structure
• Shares Outstanding & Fully Diluted
• Share Price High/Low
• 52 Week, 30 Day, and Daily
• Liquidity
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Share Structure
• Insiders, “Family and Friends”
• Institutions
• Public Stock Float
• Warrants and Options
–In-the-Money or Out-of-the-Money
–Expiry Dates
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Share Structure
• Working Capital: Cash & Equities
• Burn Rate (G & A, Exploration)
• Long Term Debt / Short Term Debt
• Recent Financings
– Proposed, Amended, Closed, Cancelled
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Quest Rare Minerals August 2009
Strange Lake, Quebec
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People
• Management Team– CEO/President, CFO, BOD
• Technical Team– COO, Chief Geologist, V-P Exploration
– Mining & Metallurgical Engineers
– Senior & Junior Geologists & Engineers
• Advisory Board
– Consultants
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People
• Educational & Professional Backgrounds
• Experience & Success / Failure
• Compensation
Salaries, Management Fees, Options, Bonuses
• Technical Expertise on BOD:
Geologists, Engineers, Financier, Lawyer, Accountant
• Insider Selling
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Rare Element Resources September 2008
Bear Lodge Mountains, Wyoming
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Evaluating Junior Resource Companies
• 50% Fail on Flagship Property
• 25% Fail on Share Structure
• 15% Fail on Management & Technical
Team
• 5% Fail on Website Presentation
• 95% Fail: Share Structure, People, & Projects
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Junior Resource Companies
• Final Test: Undervalue Compared to Peers
• Every Junior Doubles in 52 Week Period
• Dependent on Timing
• Buy at Low Volumes / Sell at High Volumes
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The Power of Two
• Stock Price Double in 12 Months or Less
• Sell ½ of Position Cost Basis = Zero
• Reinvest in Another Undervalued Stock
• Open Orders to Sell ½ at Double
• Program Selling on Uptick
• Profit Stops on Downtick
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REE Commodity Play
• +200 Companies (Intierra Resource Intelligence)
• 95% Fail Key Criteria
• 10 Companies Pass / Undervalued ?
• 4-5 New Mines Developed
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Risks in the REE Commodity Play
• Metallurgical & Chemical Processing
• Distribution / Demand of Metals
• High Capex & Operating Costs
• Global Economic Conditions
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Cream of the Crop 2007-2011
• Molycorp (MCP. NYSE)
• Rare Earth Element Resources (REE.AMEX)
• Avalon Rare Metals (AVL.AMEX)
• Quest Rare Minerals (QRM.AMEX)
• Tasman Metals Ltd (TSM. TSXV)
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Molycorp and The Minions
MCP & TSM REE & QRM
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The Cream of the Crop 2011-2012
• Mergers and Acquisitions
• Business Combinations
• Strategic Alliances
• Off-Take Contracts
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The Next Generation?
• Share Structure, People, Projects
• Undervalue
• Mines 2016-2021 ?
• M & A; Joint Ventures
• Business Combinations ; Strategic Alliances
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Medallion Resources Ltd
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Mining the Stock Market
Mark Twain: Comstock Lode 1865
Virginia City, Nevada
“A mine is a hole in the ground
with a liar standing beside it.”
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Junior Resource Companies
• Speculation is Gambling: Skew the Odds
• Do your Own Due Diligence & Research
• Company Evaluation Template
• A Day Without Learning is a Day Wasted
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Monday Morning Musings from
Mickey the Mercenary Geologist
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www.MercenaryGeologist.com
Copyright 2011